asx:sbb hy 2014 results & company presentationsunbridgegroup limited asx i hy2014 investor...

Sunbridge Group Limited ASX I HY2014 Investor Presentation October 2014

ASX:SBBHY 2014 Results & Company Presentation

Sunbridge Group Limited ASX I HY2014 Investor Presentation 2

Company Snapshot

Jiayin XuManaging Director

Wayne ReidNon-Executive Chairman

Andrew PlymptonNon-Executive Director

Ting JiangNon-Executive Director

Dr. Qiangan LiuNon-Executive Director

Chow Yee KohCompany Secretary

Market Capitalisation

Share Price as at 29 September) $0.085

Shares on Issue 471.1M

Market Cap $39M

Cash and cash equivalents $30.5M

Top 5 Shareholders

Jiayin Xu 54.94%

Citicorp Nominees Pty Ltd 13.53%

Finetrade International Limited 1.7%

Commsec Nominees Limited 1.05%

Picton Cove Pty Ltd 0.84%

Board of Directors

Sunbridge Group Limited ASX I HY2014 Investor Presentation

Highlights

3

HY revenue of $43.8 million, up 31% PCP

NPAT up 11% to $6.75M vs $6.06 million in PCP

Strong cash and cash equivalents of $30.5 million

Company owned stores now number 24 – on track for 70 by year end

Products are distributed through 427 retail stores in the PRC

Second half sales in line with expectations

Pandist 2014 Collection


Company Overview

4

• Sunbridge (ASX:SBB), designs, marketsand distributes high-quality business andcasual menswear – commenced tradingin 1996

• Two brands

• Pandist: 25 – 50 age group

• Agueseadan: 20 – 40 age group

• Introduces new designs for each seasonto cater to changing trends

• Extensive distribution network:

• over 420 authorised retail stores

• 24 company-owned stores

• Products include suits, jackets, shirts,trousers, sweaters and accessories andare broadly divided into business formal,business casual and fashion casual

100% 100%

100%

Corporate Structure

Mega Rich International Creation

Limited(HK incorporated)

Henjiasi Dress Development Co., Ltd.

Jinjiang

Bangdisidun (Fujian) Dress Development Co.,

Ltd.

Sunbridge Group Limited(Australia incorporated)


Half‐year results commentary

• Group NPAT of $6.75 million – up 11% from $AUD6.06 million in PCP

• Group revenue (excluding interest) up 31% to $43.8 million vs $33.4 million in PCP

• Group NPBT of $9.34 million, up 15% on PCP of $8.13 million

• FX translation loss impacting on comprehensive income of $AUD2.9 million

• Company-owned stores generated total revenues of $1.8 million, up from $0.7 million

• Balance sheet remains strong to fund growth - $30.5 million in cash and receivables

• Grew company-owned store network from 5 to 24


Income Statement

HY2014 HY2013 Change

Revenue ($ million) 43.8 33.4 31.1%

Gross profit ($ million) 14.5 11.4 27.2%

EBIT ($ million) 9.3 8.1 14.8%

Net Profit ($ million) 6.8 6.1 11.5%

Basic EPS ($ cents) N/A N/A N/A

Profitability ratios

Gross margin 33.1% 34.1% -1.0 p.p.

EBIT margin 21.2% 24.3% -3.1 p.p.

Net margin 15.5% 18.3% -2.8 p.p.


A$ mil

Financial Performance

0

10

20

30

40

50

60

70

80

90

FY2010 FY2011 FY2012 FY2013 HY2014

Revenue Gross profit EBIT Net Profit

32.4%34.2% 33.9% 33.8% 33.1%

22.0%

25.7%

28.9%

24.4%

21.9%

18.7%

22.0%20.7%

17.5%15.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

FY2010 FY2011 FY2012 FY2013 HY2014

Gross margin EBIT margin Net margin

43.8

14.59.3

6.75


Consolidated Balance Sheet



Cash Flow Statement

27.9

10

‐1.6 ‐4‐1.9

30.5

‐20

‐10

0

10

20

30

40

50

60

70

80

Cash and cash equivalents

Cash and cash equivalents at 1 January Net cash from operating activities Net cash used in investing activities

Net cash provided by financing activities Effect of foreign exchange rate changes Cash and cash equivalents at 30 June


Showcase Centre

• A 8-storey company headquarters near complete – total build cost of $2 million – $1.5m already expensed in the first half

• $500,000 in completion and fit out costs to be expensed in current half

• Building will be multi-purpose and income generating – will include new retail offering

• Warehousing facilities being doubled to facilitate store expansion

Artist impression of office building

Investment in Offices & Warehousing to drive growth


15,780.8 17,174.7 19,109.4 21,809.8 24,565.028,099.5

32,064.036,437.4

41,334.346,814.5

8.8%

11.3%

14.1%

12.6%

14.4% 14.1%13.6% 13.4%

13.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017FPer capital annual disposable income of urban households in China (RMB) Growth Rate

• As a result of China’s rapid economic growth and urbanisation disposable income has increased rapidly

• From 2008 to 2012, per capita urban household annual disposable income grew from RMB15,780.8 to RMB24,565.0-CAGR of 11.7%

• China’s per capita urban household annual disposable income is estimated to reach RMB46,814.5 in 2017, representing an estimated CAGR of 13.8% from 2012 to 2017

Increasing Urban Household Disposable Income

RMB

Source:NBSC, Frost&Sullivan


Growth of the PRC Menswear Market• Per capita consumption of menswear in the PRC increased to RMB806.5 in 2012 from RMB474.3 in

2008, representing a CAGR of 14.2%

• China’s per capita menswear consumption is expected to reach RMB1,654.8 in 2017, representing an estimated CAGR of 15.5% from 2012 to 2017


Aguesadan Products


Nationwide Distribution Network

15

• 427 stores across China including 24 self owned and operated stores

• Largest number of stores in coastal regions such as Jiangsu, Guangdong and Fujian provinces

Number of sales outlet growing at CAGR of 5.3% for FY2010 to FY2013

330

340

350

360

370

380

390

400

410

420

FY2010 FY2011 FY2012 FY2013

No of outlets

Distribution Coverage Retail Outlets


Continued investment in marketing & branding

16

Increased spending on regional advertising

Sponsoring 2014 Asian Beach Volleyball

Championship

Advertising through Fashion Magazine & Direct Marketing

investment

Continued to upgrade retail outlets to

enhance and reinforce brand image

Commercial TV advertisement


Product Design and Development

• In-house design team are based in Guangzhou and Wenzhou which are known as the apparels manufacturing hubs of the PRC, and work closely with OEM manufacturers

• Continued to develop new fabrics in close cooperation with it suppliers

• Brought about 400 new Pandist products to market for each season

• Pandist was honored with “the Most Innovation Brand Award” in 2013

17

New generation flagship store design

Flagship store in Jinjiang


Strategies

Brand BuildingBrand Building

Sales Network Manage‐ment

Sales Network Manage‐ment

Expand online salesExpand

online sales

Product and fabric R&DProduct and fabric R&D

M&A opportunities

M&A opportunities

Our work in 2014

• Continue to build-up and raise brand image through innovative marketing strategies

• Tie up with department store chain operators (e.g. Vans and SM) and large wholesale distributors to increase distribution network and sales

• Increase number of self-operated retail outlets (either through new set-up or acquire from existing retailers) to have better control over product inventory, pricing, brand image and service standards

• Develop online retail platform

• Escalate R&D efforts and increase proportion of innovative products

• Explore M&A or business opportunities in Australia


Outlook & Growth Strategy

• Revenue and profit for second half in line with expectations

• Sales are stable with first few trading months

• SBB to deploy cash on hand of $30.5 million to drive growth

• Total investment of $16 million by end of calendar 2014:

• $9.0 million to be invested in store renovations

• $4.0 million on new store openings and acquisitions

• $3.0 million worth of short term loans to be repaid

• New objective of 70 company-owned stores by calendar year end

• SBB well positioned for growth in current half and beyond

19


The information contained in this presentation is intended solely for your personal reference. Such information is subject tochange without notice, its accuracy is not guaranteed and it may not contain all material information concerning SunbridgeGroup Limited (the “Company”). The Company makes no representation regarding, and assumes no responsibility orliability for, the accuracy or completeness of, or any errors or omissions in, any information contained herein.

In addition, the information contains projections and forward-looking statements that reflect the Company’s current viewswith respect to future events and financial performance. These views are based on current assumptions which are subjectto various risks and which may change over time. No assurance can be given that future events will occur, that projectionswill be achieved, or that the Company’s assumptions are correct. It is not the intention to provide, and you may not rely onthis presentation as providing, a complete or comprehensive analysis of the Company’s financial or trading position orprospects.

This presentation does not constitute an offer or invitation to purchase or subscribe for any securities or financialinstruments or to provide any investment service or investment advice, and no part of it shall form the basis of or be reliedupon in connection with any contract, commitment or investment decision in relation thereto.

Disclaimer


ASX: SBB

Contact DetailsRegistered Office Level 31, 120 Collins Street,

Melbourne, Victoria 3000Head Office No 11 Longhu, Shaohui Industrial Area, Jinjiang

City, Fujian Province, PRCWebsite www.sunbridge.com.au

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